The Myth of the Big Paycheck

When you finally start your career as a physician, the big paycheck can be intoxicating and empowering. However, the decisions you make in those early days could have long-term implications.

Today The Alemian File is reaching out to all the new physicians who will be ending their residency this coming season and starting their new career. It’s safe to say, your income is about to go up substantially, and this brings us to the myth of the big paycheck. Here is what happens to almost every new physician out there: In the first few years, they may buy cars, purchase a new home, buy furniture, and whatever else they’ve been dreaming about. Hey, you’ve worked hard, and you deserve to enjoy the rewards of your labor. That being said, you also have to be very careful because here’s the big trap that so many fall into:

The mortgage broker is only too happy to help you, and based on your income says you can afford X. You then tell the real estate agent what size mortgage you qualify for. The real estate agent then shows you homes in that price range. What no one told you is that just because you can qualify for the big mortgage does not mean that you should get a loan that big, because there are so many other things in life to pay for. The same thing will happen when you go to buy a car, the salesman will make it very easy for you to buy the brand new luxury car you’ve always dreamed about, and a second one for your spouse. Everywhere you turn, banks, credit card companies, mortgage brokers, real estate agents, car salesman department stores, are all giving you very high credit limits. Before you know it, your monthly bills are equal to your take-home pay. You’re living paycheck to paycheck, just like before. It’s just a bigger paycheck. Remember, whatever they’re selling, will still be there tomorrow. That one-of-a-kind dream house is only one of many dream houses out there in the world. The beautiful car in the showroom will be replaced by another beautiful car as soon as the first one is sold.

Here’s what happens to physicians who fall into that trap: The bills mount up, so they work extra shifts, and they see more patients to earn more money. The problem is, there’s a ceiling to that, because there are only so many hours in a day, and only so many days in a week. They have no time to enjoy their lifestyle, and it leads to physician burnout. Physician burnout is a huge problem, and 50% of physician burnout is due to financial stress.

Don’t get caught in the credit and debt trap, because once you’re in it, it’s really hard to get out of it. Look for ways to save your money, spend it wisely and live within your means. You can have a great lifestyle, but it's a better lifestyle when you’re not killing yourself trying to pay the bills.

If you have questions send an email to David@TheAlemianFile.com. In the meantime, check out and “LIKE” The Alemian File Facebook page. You might also want to check out my website at CapitalCrestFinancialGroup.com.

Absolutely, make sure you come back here next week to Physician’s Money Digest for another edition of The Alemian File.